Sunday, May 26, 2013

Oil Sand Waste and Politics: Why Executive Values Matter

Cities sometimes have a hard time escaping their
reputations. Take Detroit. Windsor, on the Canadian side of the river, has the
riverside lined with Assumption Park, Ernest Atkinson Park, and Straith Park.
Detroit has Riverside Park, a rail yard, and now a big mountain of petroleum coke, a byproduct of (Canadian) oil sands refining. One might say that a city
isn’t a very good place for oil refining byproducts, and that the Canadians
should not bring their waste to a major US city. But actually, the waste is
owned by the US company Koch Carbon, and the residents of Windsor, as well as
Detroit, would really like it to be somewhere else.

Why put it there? It is earmarked for export to places where
lax environmental rules allow burning of petroleum coke that releases
greenhouse gases and sulfur levels at levels that would be unacceptable in
the US or Canada. Detroit happens to be a convenient intermediate storage
point. Now, one could say that it takes exceptional levels of environmental
disregard in order to create an eyesore in one place so that you can move a
potential pollutant across the world and contribute to global warming. But the
owners of Koch Carbon don't believe in global warming and have funded research
trying to disprove it. They are the famous Koch brothers (one of them is also
the CEO of Koch Carbon, as far as I can tell), who are best known for creating and funding
free-market think tanks, and for having a very strong record of economic support
to republican candidates for election.

Normally a paragraph above would be a standard rhetorical
trick. It is juxtaposition of facts that gives the impression that
conservatives are polluters, without any rigorous foundations. Even with the
example of Koch Carbon, there may be lots of polluting liberal CEOs and lots of responsible
conservative CEOs. But actually, recent research published in Administrative Science Quarterly by Chin, Hambrick, and Trevino suggests that the values of
CEOs do have effects, at least on corporate social responsibility (CSR). They
found that conservative CEOs showed less CSR advances in total than liberal
ones, and moreover that conservative CEOs seemed to be more strategic about
their use of CSR. They did more when their firm was doing well, and scaled it
down when their firm did not, whereas liberal ones were not so selective.

So conservatives really are less responsible, at least as
defined by the standards held up by the CSR movement. We don't actually know
whether this means that companies run by conservatives pollute more. But, Koch Carbon is certainly
not doing anything to avoid giving that impression.